HCL Technologies

Securities Class Actions

Securities Class Actions

Securities class action is a type of corporate action in which a lawsuit is filed against a company by a group of people or a representative or an organization referred to as the “class”. Securities class action filings have been growing from 2012, though the number of filings in 2014 was slightly lesser than the average filings in the last 10 years (172 filings). Also, percentage of traditional securities class actions excluding filings related to credit crisis, mergers & acquisitions and Chinese reverse mergers were higher compared to filings from 2007-13.

Despite the growth in number of filings in 2014, the disclosure dollar value (DDl) has come down by around 45% as class actions with DDls less than or equal to 1 billion dollars account for half of the total DDl and there were no mega DDl filings (DDl more than 5 billion dollars). Misrepresentations in financial statements was the most common complaint among the filings while false forward looking statements and Gaap violations were also part of complaints in significant number of filings in 2014.